The hacker group LulzSec claimed responsibility. They also did a phone attack on the FBI today. It's clear they think they're untraceable. (Source: LulzSec)

Aaron Barr, disgraced former CEO of HBGary appears to be involved in an attempt to implicate LulzSec in Bitcoin theft. It does not appear LulzSec did anything of the sort. It is unclear whether a series of posting are designed to discredit/attack LulzSec, Bitcoin, or both. (Source: Nerd Merit Badges)

Group's attack continue to grow more flagrant, as do its detractors

At around 6 p.m. Wednesday night after a busy day of distributed denial of service (DDoS) attacks some "31337" 2005-era "/b/tards" posted a microblog to Twitter. But these weren't just any "/b/tards"; these were the most infamous hackers of the year -- LulzSec.

The apparent takedown of the CIA homepage is merely the latest in the griefers' audacious run of high profile system intrusions and DDOS attacks on gaming services, government entities, and more.

The hack outraged th3j35t3r ("The Jester" in leetspeak), a pro-American "hacktivist". He swore to LulzSec:

@lulzsec - re: your last hit. Gloves off. Expect me. My silence is not an indication of weakness, as your mouth is an indication of yours.

But if The Jester or anyone else can stop the group, they haven't yet. LulzSec appears to think itself untraceable, given its flagrant hacks -- infiltrating the U.S. Senate servers, hacking an U.S. Federal Bureau of Investigations affiliate, and now hacking the public presence of the world's "most powerful" intelligence agency.

And it's using new tactics. LulzSec has set up two phone lines -- 614-LULZSEC or 732-993-7703 -- and is taking thousands of calls a day. Some it actually answers, asking guests questions for prizes or regaling them in a faux French accents. But it's also redirect the calls to phone denial of service (DOS) attacks -- something rarely seen today.

Today it direct this phone wrath at the online MMORPG World of Warcraft's customer support, the FBI's Detroit headquarters, and "a certain hosting company" (many suspect it was GoDaddy). Last, but not least it direct attacks at disgraced security firm HBGary who was the subject of much lashing at the hands of Anonymous earlier this year.

Clearly that account appears to be involved with some mass fraud or is a clever social engineering project to offer the appearance of a mass fraud. Either way, the attempt to tie LulzSec to it seems clearly flawed and like a clear framing. No official LulzSec press release has ever carried that number.

It's unclear whether Mr. Barr is merely a uninformed observer, or is more deeply involved with this possible framing attempt. But it's clear that his wild claims appear unfounded.

It's also possible that the postings are some sort of attempt to discredit Bitcoin itself. In recent weeks several news agencies have been spreading posts with dubious claims, attempting to discredit the digital crypto-currency.

An odd alliance of libertarians, geeks, businesspeople and drug kingpins hail Bitcoin as the future of the internet – global, private and immune from national economic crises and the whims of reckless bankers. Its critics in the political sphere fear that it could give rise to an online Wild West of gambling, prostitution and global bazaars for contraband.Previously dismissed as a nerdy curiosity, the untaxable Bitcoin may soon be due for a crackdown.

Not all Bitcoin enthusiasts embrace Silk Road. Some think the association with drugs will tarnish the young technology, or might draw the attention of federal authorities. "The real story with Silk Road is the quantity of people anxious to escape a centralized currency and trade," a longtime bitcoin user named Maiya told us in a chat. "Some of us view Bitcoin as a real currency, not drug barter tokens."

Silk Road and Bitcoins could herald a black market eCommerce revolution. But anonymity cuts both ways. How long until a DEA agent sets up a fake Silk Road account and starts sending SWAT teams instead of LSD to the addresses she gets? As Silk Road inevitably spills out of the bitcoin bubble, its drug-swapping utopians will meet a harsh reality no anonymizing network can blur.

Seemingly, some people are suggesting that Bitcoin is more villainous than the far more anonymous form of currency -- cash. The source of this misinformation/smear campaign is unknown, though, news agencies seem happy to spread it gleefully.

III. Insecure World

Much has been made to explain how LulzSec is doing what it does. But the fact of the matter is that the group isn't using new tactics, new tools, or new exploits. It's just getting more attention because it's good at advertising what it does and its affecting lots of people.

But the fact of the matter is that many corporate and government systems today are incredibly insecure and the vast majority of users are utterly incompetent when it comes to security [1][2][3] -- even some system administrators [1].

Combine these factors and you get an infinitely abusable system.

The abuses have occurred in years past. They may be happening at a faster rate this year. But the system has been insecure for years. And it will likely still be insecure next year, as well.

"I'd be pissed too, but you didn't have to go all Minority Report on his ass!" -- Jon Stewart on police raiding Gizmodo editor Jason Chen's home